Meta’s mass layoff severance agreements illegal, says judge

Separation agreements Meta gave to employees during mass 2022 layoffs are illegal, a US judge has decided, and the reasoning could have implications far beyond Zuckercorp.

National Labor Relations Board (NLRB) administrative law judge Andrew Gollin issued a decision [PDF] on Friday, finding Meta’s separation agreement violated employee rights provisions of the National Labor Relations Act (NLRA) by relying on “overly broad language” in its non-disparagement and confidentiality sections.

Gollin stated that these sections were written in a way that tends to “interfere with, restrain, or coerce employees in the exercise of their rights.”

The judge ordered Meta to eliminate the offending language, contact all employees who signed one of the problematic agreements to tell them what has happened, and post additional notices in workplaces telling employees of their NLRB-given rights.

According to the NLRB, approximately 7,511 ex-Meta employees were presented with the agreements, most of whom were part of the first mass layoff in Meta’s history in November 2022. The NLRB said 7,236 Meta employees signed the agreement, including David James Carlson, the complainant in the case. 

Meta didn’t respond to questions about the judge’s decision. The matter is not yet settled as the NLRB board is currently reviewing the case to make a final decision.

Final ruling could have broad implications

It’s unknown how the board will decide, but if it upholds Gollin’s decision, severance agreements could change considerably.

The particular clauses under examination in the case were reportedly used by Meta in its separation agreements between August 2022 and February 2023. They award outgoing employees with a bump in severance pay and additional post-employment benefits, provided they agree not to talk publicly about their work and waive any claims arising from disputes over their time at Meta, or their termination.

Gollin noted that Carlson didn’t immediately file the case, instead waiting until an NLRB decision in February 2023 (McLaren Macomb) that barred employers from offering severance agreements that require employees to waive their rights under the NLRA. The McLaren decision reversed two prior NLRB cases, Baylor and IGT, which established the prior precedent that the sort of language in Meta’s employment agreement was perfectly legal.

“The Board declared a severance agreement will be found to be unlawful if it broadly precludes an employee from discussing or disclosing labor disputes or concerns about working conditions with other employees, a labor organization, the Board, or the public,” Gollin wrote in his decision. “It further held that conditioning severance pay or benefits on the forfeiture of statutory rights plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights, unless it is narrowly tailored to respect the range of those rights.”

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The offending sections of the separation agreement in the McClaren case are “substantially similar” to Meta’s, and Gollin decided that it met the same standard of illegality.

As Meta’s agreement was written and used prior to the McClaren case, however, Meta argued that it was in the clear and retroactive application wasn’t appropriate. Gollin disagreed.

“The Board’s usual practice in unfair labor practice cases is to apply new policies and standards retroactively ‘to all pending cases in whatever stage,’ unless retroactive application would work a ‘manifest injustice,'” Gollin wrote, and there’s no manifest injustice here.

“[Meta] presented no evidence that it relied upon [prior policies and standards] when it drafted, offered, or entered into the Separation Agreements at issue,” Gollin said. “Quite the opposite, [Meta] argues that it carefully drafted, or ‘narrowly tailored,’ the sections at issue so as not to interfere with, restrain, or coerce employees.”

With McLaren now the standard, many other companies could face complaints that similarly hold their separation agreements are illegal. Add to that retroactive applicability, and it’s easy to expect more cases will be coming.

We asked the NLRB if there are any other cases in its system making use of the McLaren precedent, but haven’t heard back. ®

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